Embraer shares soar on announcement of Eve cope with SPAC, NYSE itemizing By Reuters
© Reuters. FILE PHOTO: The logo of the Brazilian aircraft manufacturer Embraer SA can be seen at the company’s headquarters in Sao Jose dos Campos, Brazil, on February 28, 2018. REUTERS / Roosevelt Cassio
By Tatiana Bautzer and Gabriel Araujo
SAO PAULO (Reuters) shares in the Brazilian aircraft manufacturer Embraer SA (NYSE 🙂 soared Tuesday after the company announced it would merge its electric aircraft subsidiary Eve with Zanite SPAC and list it on the New York Stock Exchange.
The transaction values Eve’s equity at $ 2.9 billion and includes the merger with Zanite Acquisition Corp and an additional investment by a group of investors that includes Embraer, Zanite, financial investors and strategic partners such as Azorra Aviation, BAE Systems (OTC :), Republic include Airways, Rolls-Royce (OTC 🙂 and SkyWest (NASDAQ 🙂 Inc.
Following the transactions, Eve, listed on the NYSE under the ticker EVEX, will have $ 512 million in cash that will be used to develop its air taxi. The company is expected to start trading in the second quarter of 2022 after closing the deal with Zanite.
Eve already has an order pipeline of more than $ 5 billion. Customers with pre-orders include lessors, helicopter operators and carpooling.
Following the announcement of Eve’s listing, Embraer also announced new orders. Florida-based Azorra, one of Eve’s investors, ordered 200 aircraft with electric vertical take-off and landing (eVTOL) from Eve. Republic Airways, also an investor, placed an order for up to 200 evTOLs with the aim of implementing an eVTOL network in the US central and east coast markets.
Skywest, part of the same investor group, has ordered 100 electric aircraft to build a regional chain in the US, while BAE Systems will work with Eve to study the development of its eVTOLs for the defense market.
Embraer shares traded in Brazil rose 16% to 23.08 reais when it opened in Sao Paulo.
Embraer will own more than 80% of Eve following the SPAC combination and additional investments by the group. Eve’s cash position is expected to be sufficient to fund the development of air taxis through certification expected in 2025, Embraer CEO Francisco Gomes Neto told Reuters.
Gomes Neto said in an interview that Eve will likely have multiple manufacturing facilities to cater to customers on different continents, but the locations have not yet been selected. Gomes Neto expects Eve to have sales of $ 4.5 billion by 2030.
The production phase will likely be financed through debt, said Jerry DeMuro, co-CEO of Eve, former CEO of BAE Systems. Eve’s other co-CEO is Andre Stein, an Embraer manager for two decades.
Embraer will provide Eve with the infrastructure, including assigning engineers for the projects, proving grounds and simulation equipment.
“That way we can cut costs,” said DeMuro in an interview.
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